ASSIGNMENT-3

ASSIGNMENT ON CORPORATE LEGAL ENVIRONMENT

Submitted To: Mrs. Megha Munjal Sharma (Assistant Professor) Department Of Business Management D.A.V.I.E.T Jalandhar

Submitted By: TanyaPreet Kaur M.B.A (3rd sem) Univ. Roll No.1176156 Class Roll No.2157/11

CASE
IN THE SUPREME COURT OF INDIA C.A. Nos. 5646-5976 of 2003 Decided On: 05.11.2009 Appellants: I.T.I. Limited Vs. Respondent: I.T.I. EX/VR Employees/Officers Welfare Association and Ors. Facts and Figures of the above case:
1. The said scheme was introduced by the appellant to reduce the surplus manpower and bring down the strength of employees to optimum levels. In pursuance of it, different public sector companies formulated different VRS to encourage employees to retire from services. As per the scheme introduced by the appellant, certain benefits were conferred on the persons who opted for VR. 2. Pursuant to this scheme, officers as well as workmen of the ITI, opted for VRS. Accordingly, the ITI settled the amount payable to the persons who opted for VR and their resignations were also accepted.
3.

The Ministry of Industries, Department of Public Enterprises, New Delhi, by its order dated 19th July, 1995, revised the scales of pay. the appellant-ITI revised the pay scales and allowances of executives in Grades I to X as per the Office Circular No. 409, dated 6-9-1995.

4.

The employees who have voluntarily retired under the scheme dated 21-51992, 5-6-1993 and 9-4-1994 said that they should be entitled to the benefit

of revision of pay scales with retrospective effect and the petitioners who retired under the VR Scheme should be entitled for the ex gratia payment.

Judgement
The Judge held that the persons who were officers and who retired under the VRS dated 21-5-1992, 5-6-1993, 9-4-1994, 20-6-1994 and 7-7-1994 are entitled to payment of additional ex gratia amount by recalculating the ex gratia amount on the basis of the revised pay plus allowances, on account of revision of pay and allowances with retrospective effect from 1-1-1992 and also declared that the petitioners in all the writ petitions, were entitled to benefit of incentives under the Circulars dated 28-5-1994 wherever applicable even though they have retired under the VRS. It was also held that any additional amount paid to the employees who opted for VRS Scheme shall not be recovered.

Essential elements of Indian contract Act (1872) applicable in this case is: OFFER

1. An offer for voluntary retirement in terms of a scheme, when accepted, leads to a concluded contract between the employer and the employee.
2.

When pursuant to or in furtherance of such a Voluntary Retirement Scheme an employee opts therefor, he makes an offer which upon acceptance by the employer gives rise to a contract. Thus, as the matter relating to voluntary retirement is not governed by any Statute, the provisions of the Contract Act, 1872, therefore, would be applicable too.

Sources Accessed

http://www.manupatrafast.in/pers/Personalized.aspx http://indiankanoon.org/doc/1352860/